Audit rate for 1993 and 1994 up only slightly.

Internal Revenue Service data for 1994 show that overall, the percentage of taxpayers' returns audited rose only slightly over 1993. However, the percentage of estate tax returns audited fell.

Overall picture. In 1994, the IRS audited 0.93% of all taxpayers. For 1993 and 1992, by comparison, the rates were 0.85% and 0.96%, respectively. However, the 1995 audit rate is expected to be the highest in a decade. The Treasury Appropriations Bill for 1995 contains funds to hire 5,000 new IRS enforcement employees and to perform 450,000 additional audits. The IRS is planning a 1.25% audit rate for 1995.

Estate tax returns. In 1994 the IRS audited 15% of the 73,000 estate tax returns filed in 1993. By contrast, in 1993 the IRS audited 17% of the 1992 estate tax returns, and in 1989 it audited 24% of the 1988 returns.

However, the total amount of added tax and penalties auditors recommend has risen from earlier years, growing from $1.05 billion in 1993 to $1.25 billion in 1994.

The 1994 audit rate for estates valued at $5 million and over was 48%. Estates valued between $1 million and $5 million were audited at a rate of 23%, and those worth less than $1 million had an 8% audit rate.